About Gold Exchange Traded Funds ( Gold ETFs):
- They are commodity-based exchange-traded funds with an underlying asset as gold.
- They are passive investment instruments that are based on gold prices and invest in gold bullion.
- Gold ETFs are units representing physical gold which may be in paper or dematerialised form.
- One Gold ETF unit is equal to 1 gram of gold and is backed by physical gold of very high purity.
- Gold ETFs combine the flexibility of stock investment and the simplicity of gold investments.
- They are listed and traded on the National Stock Exchange of India (NSE) and Bombay Stock Exchange Ltd. (BSE) like a stock of any company.
- It can be bought and sold continuously at market prices.
- There is a complete transparency on the holdings of a Gold ETF due to its direct gold pricing.
- ETFs have much lower expenses as compared to physical gold investments.
What is an Exchange Traded Fund (ETF) ?
- An ETF is a collection of investments such as equities or bonds.
- It is a basket of securities that trades on an exchange just like a stock does.
- ETF share prices fluctuate all day as the ETF is bought and sold, which is different from mutual funds, which only trade once a day after the market closes.
- ETFs can contain all types of investments, including stocks, commodities, or bonds
- They have cheaper fees than other types of funds.
What is Passive Investment?
- It is an investment strategy wherein investors buy securities that mirror stock market indexes and hold them long-term.
- It is a strategy that focuses on replicating the index performance as opposed to daily buying and selling.
- Passive investing seeks to avoid the management fees and high transaction costs that frequent trading can cause.
Q1) What is an active investment?
Active investment is a form of investment strategy that involves actively buying and selling assets in the hope of making profits and outperforming a benchmark or index.
Source: Gold ETF inflows slump as prices rise
Last updated on June, 2025
→ UPSC Notification 2025 was released on 22nd January 2025.
→ UPSC Prelims Result 2025 is out now for the CSE held on 25 May 2025.
→ UPSC Prelims Question Paper 2025 and Unofficial Prelims Answer Key 2025 are available now.
→ UPSC Calendar 2026 is released on 15th May, 2025.
→ The UPSC Vacancy 2025 were released 1129, out of which 979 were for UPSC CSE and remaining 150 are for UPSC IFoS.
→ UPSC Mains 2025 will be conducted on 22nd August 2025.
→ UPSC Prelims 2026 will be conducted on 24th May, 2026 & UPSC Mains 2026 will be conducted on 21st August 2026.
→ The UPSC Selection Process is of 3 stages-Prelims, Mains and Interview.
→ UPSC Result 2024 is released with latest UPSC Marksheet 2024. Check Now!
→ UPSC Toppers List 2024 is released now. Shakti Dubey is UPSC AIR 1 2024 Topper.
→ Also check Best IAS Coaching in Delhi